Can you a rent out a co-op?

Asked by Anton, Bath Beach, Brooklyn, NY Sat Nov 13, 2010

I am trying to get a better idea of pros and cons of owning a condo and owning a co-op. I understand that in a condo you own the actual apartment while a co-op is a share of the building. But what are the other significant differences. And are there co-ops that can be rented out?

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David Rogoff and Bonnie Chernin’s answer
David Rogoff…, , Brooklyn, NY
Mon Nov 15, 2010
Dear Anton:

As others have responded house rules need to be reviewed carefully before you buy.

Using some real examples we can provide some insights:

Some co-ops require your potential tenant to be approved by them others do not. We know of one that the tenant must appear every two years.

A co-op may levy a surcharge over the normal maintenance charges if you are subletting.

Many require a wait period where the purchaser must move in and reside for a period of time before subletting (usually 1-2 years).

A good agent specializing in co-ops can assist you and provide you the information required to make the correct decision.

Please feel free to contact us if you have further questions.

Best regards,

David Rogoff and Bonnie Chernin
Real Estate Sales Associates
Fillmore Real Estate - Branch 19
917-593-4068 - David mobile
646-318-5031 - Bonnie mobile
e-mail: -
0 votes
Mitchell Fel…, Agent, Brooklyn, NY
Sun Nov 14, 2010
Dear Anton:

Each co-op has it's own "house rules" and/or policies. You have to check with the co-op management company as to what the co-ops policy is with regard to sublet. Some simply will not allow it while other will allow sublet but usually with board approval. I have also witnessed co-ops that charge the owner a sublet fee and often times even if they do allow sublet they only do so after you have owned the co-op for several years as your primary residence. With condos you can basically sublet any time you want.

While you are checking out the sublet policy you also need to check out the following (and how that question relates to condos):

1) What is the pet policy? If the co-op does not allow pets, you may have a harder time renting or selling the place because many people have pets and your shut out from that portion of the market. Most condos do not have a pet policy as pets are simply allowed.

2) What is the flip tax policy? Flip tax is a tax that the co-op charges the seller when he or she sells the co-op. I have witnessed flip taxes as high as 20%! This can take a substancial bite out of your net dollar when you sell so be careful! Condos do not have a flip tax.

3) What percentage of the co-op is privately owned as opposed to sponsor owned? If the ratio is low you may have a hard time getting a mortgage on the co-op. This will also make it harder to sell down the road. The best case scenario is if it is 100% privately owned. You also have to be careful with this with condos, especially new construction because often times the banks will not lend until a certain percentage of the condo is sold.

4) Are there minimum down income and/or income requirements for potential buyers in the co-op? Also, with co-ops the buyer has to be approved by the board and many times they will take other things into consideration besides the purchasers financial well being! Again, this will limit the buyer pool. With condos the only restrictions here are based on a buyers qualifications and there is no board approval.

5) Another question is the monthly maintenance, how much is it and what utilities does it include (co-op maintenance always includes real estate taxes)? This is also true for condos but you pay your own utilites and real estate taxes with a condo.

6) You have to make sure your accountant or lawyer views the last two or three years financial statements to make sure the co-op or condo is financailly solvent! If the finances are good that menas there is less of a chnace that the monthly maintenance will go up. The same can be said for a condo.

Condos usually wil be prices higher than a co-op relatively speaking but also the monthly maintenance fees will be lower for the condo. Also, with condo it is easier to find a parking space as they are often times sold with the units, this is not the case with a condo.

If you have further questions please contact me as I would be happy to help you more. Good luck!

Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
1 vote
Charles D'Al…, Agent, Brooklyn, NY
Sun Nov 14, 2010
As you see from my colleagues there are differences. It is a personal choice to which is better. My one advice is to buy what works for you and your family. As for renting you must read the by laws of the development . For some more information read the blog below , Brooklyn Condos vs. Houses: Which Should You Choose?
0 votes
Craig Bailey, Home Seller, Las Vegas, NV
Sat Nov 13, 2010
That is a very subjective question. Renting in a co-op means a ton of paperwork, a board meeting and sometimes waiting a painfully long time before you find out if you were approved. If you don't mind lengthy process to save 10-50% off rent then, i suggest you try it.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sat Nov 13, 2010
If planning on buying a co-op, and forsee renting the unit in the future, do check for the house rules--some may not allow renting at all, some may after being a resident for a specified time with board approval only--therefore inform yourself well and check all co-op documentation. As for the difference between a co-op and a condo--Simply put, the traditional housing co-op involves the formation of a corporation for the purpose of acquiring title to a multi-unit building and, in turn, leasing individual units (apartments) to the shareholders of the corporation; whereas condominium ownership involves acquiring title to individual apartments or units. In fact, condominium ownership is, for most practical purposes, only one form of cooperative housing and, like the co-op, must include provisions for management and maintenance of the building(s) and common areas, usually dictated by an elected Board of Managers, in the case of a condominium, and a Board of Directors in the case of a co-op. The condo advantage of individual unit ownership can be compared to the benefit of being able to choose your neighbors, in a co-op setting, where the application process is very often quite selective. In the sale of a condo, once a price is agreed upon, the deal is done; whereas the sale of a co-op requires approval by the Board of Directors—which can be (and often is) withheld based upon arbitrary selection criteria—with no recourse to the buyer or seller if the sale is not approved. Co-op ownership represents an interest (i.e. stock) in realty; condo ownership is actual ownership of realty. Price differences reflect demographic and geographic distinctions. You decide what’s best for you.
0 votes
Jack Menashe, Agent, Brooklyn, NY
Sat Nov 13, 2010
Whether or not you can rent a co-op is also up to your co-op board. Sometimes there are chargebacks though it may be allowed. Usually the tenant will have to pass the board for approval even in a rental.

When it comes to maintenance, insurance & taxes the corporation is responsible for those payments regardless of how many people occupy the building. That's the major difference because in a condo it is your personal property you are holding responsibility. However - whichever you choose make sure your accountant reviews the buildings financial statements & returns. Always use a professional in their respective fields whether it be an accountant or lawyer.

Good luck.


Jack Menashe
0 votes
Robbie Vaughn, Agent, Mineola, NY
Sat Nov 13, 2010

Co-op: You purchase shares of stock in a corporation. The shares come with a proprietary lease for one of the residences/units in the building.

Condo: Fee simple ownership (the most complete ownership interest one can have in real property).

Co-op: You usually must obtain co-op board approval to sublet or sell the unit. Board approval is not always forthcoming.

Condo: No approval needed to sell or rent out.

There's a lot more to learn. Do your research. Get a good Realtor. Get a good Attorney. Good Luck!

This is not legal advice.

Law Firm of Vaughn & Weber, PLLC
217 Willis Ave
Mineola, NY 11501
0 votes
Greg Donato, Agent, Brooklyn, NY
Sat Nov 13, 2010

I would be happy to speak to you about the differences. Generally, you when buying a condo you own the physical space, a co-0p is a corporation made up of share holders who own shares prorated by square footage of the property. Co-ops share the expenses or running the property (ie;taxes, insurance, fuel, maintenance etc) which establishes the manteance fees for the share holders based on number of shares owned. Condo owners pay the expenses (taxes, fuel, insurance etc) and esablish their own acconts with utilities directly. There are pros and cons to each form - but the vast majority of "apartment" buildings within the Bath Beach community and surrounding Bay Ridge and Dyker Heights areas are co-ops many of which were convered in the 1980's, although some newer low rise condos have become popular in the past few years. Co-ops differ in terms of their policies regarding rentals - many strive to be 100% owner occupied which can provide for much more stability as it is assumed owners have more of a vested interest in maintaining the investment they have in the individual appartments they own. I hope this has been helpful to you. Pleae feel free to reach out to me if I can be of assistance.
0 votes
michele cado…, Agent, Brooklyn, NY
Sat Nov 13, 2010
There are coops that can be rented out. I would suggest that if you have a particular building in mind contact the management. You'll will find that management contact infor in the vestibule of the building usually above the doorbells or if its a doorman building simply ask the dooman for the contact info.
0 votes
Fajardo Dela…, Agent, Flushing, NY
Sat Nov 13, 2010
Understand that when buying a condo you are buying one of several homes which are grouped together. You will have neighbors close by, possibly below and above you. If you’re looking for privacy, this may not be your best option. Hard to get the other owners to agree rentals, co-ops will be up to the broad. Each one is diffrent.
Web Reference:  http://www.DESIRE2OWN.COM
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